Although the iPhone now appears to be AT&T’s ace in the hole, Verizon actually had first dibs on the iPhone, but refused.
Reports back in January said that Apple approached Verizon with the iPhone, but
the carrier turned it down because it felt that Apple’s terms for exclusivity
were unreasonable.

“We said no [to the iPhone offer]. We have nothing bad to
say about the Apple iPhone. We just couldn't reach a deal that was mutually
beneficial,” said Verizon Wireless vice president Jim Gerace.

Verizon, however, appears to have no regrets on passing up
the iPhone, and even believes that the exclusivity of the phone won’t do much
to help AT&T. Instead, Verizon believes that it has a superior network and
cellular technology.

“The issue is not the Apple-ness of the iPhone itself, but
with the cellular network that it is running on,” said Denny Strigl, Verizon’s
chief operating officer, insinuating that AT&T’s network is sub-par. “That
will be the true test of the iPhone: What will the iPhone experience be?”

Verizon isn’t going to simply play the waiting game while
AT&T flashes its iPhone product on every advertising medium available.
Although the carrier won’t be getting any Apple products in the near future,
Strigl confirmed with USA
Today that Verizon is already working with an unnamed manufacturer on a
phone that will directly compete against the iPhone.

“We do have a very good response in the mill,” the
Verizon COO said. “You'll see that from us in the late summer.”

"This is about the Internet. Everything on the Internet is encrypted. This is not a BlackBerry-only issue. If they can't deal with the Internet, they should shut it off." -- RIM co-CEO Michael Lazaridis